House of Representatives

HB 2398

tax return; use tax declaration

Sponsor: Representatives Giffords, Clark, Loredo and Sedillo

 

DPA

S/E

Committee on Ways and Means
DPA

S/E

Committee on Appropriations

X

Caucus and COW

 

Third Read

 

 

As Passed the House

HB 2398 would require taxpayers to declare liability for all use taxes for tangible personal property, for which no taxes were paid by the retailer, on their individual income tax return.

 

Current Status

HB 2398 passed the Ways and Means Committee with a strike-everything amendment on the same subject. HB 2398 passed the Appropriations Committee with the same strike-everything amendment.

 

History

According to the Department of Revenue, businesses remit use taxes on separate forms supplied with transaction privilege (sales) tax forms.  Currently, There is no designated place for taxpayers to declare owed use taxes—so the state loses these legal revenues.  On items purchased online, often no sales taxes are paid, and so a use tax is owed.  HB 2398 would allow taxpayers to voluntarily pay for owed use taxes, by declaring them on their individual income tax form.  Nationwide, two methods exist for reporting use taxes: a line on the income tax form or a separate form included in the income tax package.  Other states that have recently enacted similar statute are listed in the table on the following page.

 

Provisions

·          Requires declaration of liability from taxpayer for use taxes not paid by the retailer on the individual income tax return.

 

A Strike-Everything amendment to HB 2398 was adopted in the Ways and Means Committee with the following provisions:

·          Requires any taxpayer that purchases tangible personal property for use or consumption in this state to remit the use tax on a form prescribed by DOR.

·          Requires DOR to provide a use tax form to accompany the individual income tax form and booklet. 

·          Taxpayers shall remit the use tax by April 15 for use tax liabilities encountered in the previous calendar year.  Tax is not due if the annual tax liability is less than $50.

 

 

 

 

State

Reporting Method

Number of Taxpayers/Dollars Collected

Alabama

Line

$182, 087 (partial for 2000)

Connecticut

Line

11,591 taxpayers; $1 million (1999)

Idaho

Line

5,120 taxpayers; $98,347 1992)

Illinois

Form

3,545 taxpayers; $208,000 (1999)

Indiana

Line

16,210 taxpayers; $457,107 (1992)

Kentucky

Line

17,434 taxpayers; $882,472 (1998)

Maine

Line (1)

82,657 taxpayers; $1.5 million (1999)

Michigan

Line (2)

64,650 taxpayers; $2.9 million (1999)

Missouri

Form

162 taxpayers; $29,349 (1999)

New Jersey

Line

11,209 taxpayers; $407,128 (1998)

North Carolina

Form (2)

1,488 taxpayers; $234,002  (1999)

Ohio

Line

 

South Carolina

Form

 

Utah

Line

3,543 taxpayers; $149,844 (1999)

Vermont

Line

5,484 taxpayers; $235,944

Virginia

Line

 

Wisconsin

Line

26,012 taxpayers; $1,409,329

District of Columbia

Form

 

(1)    Effective January 1, 1999, residents leaving the use tax line blank will owe zero taxes  (previously, Maine Revenue Services calculated use tax of 0.4% of Adjusted Gross Income when the line was not filled in).

(2)    Effective for tax returns filed after 1999, taxpayers will have a separate line on the income tax form to report and pay use tax.

 

 

 

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45th Legislature                       

Second Regular Session            2          April 3, 2002

 

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